Kroger trounced first quarter sales and profit forecasts, posting a 3.3% gain in identical store sales that drove a 92 cent a share profit.
Total sales increased 3.4% to $30 billion and the 3.3% gain in identical store sales was well ahead of analysts’ forecast of 2.8% growth. It was the company’s 38th consecutive quarter of positive identical store sales growth. Net income increased 9.6% to $481 million which translated to per share profit of 92 cents that was four cents better than the 88 cents analysts’ forecast.
"Kroger achieved strong sales and record earnings per share for the quarter, and our customers' positive view of us continues to improve," said Dave Dillon, Kroger's chairman and CEO. "This is because of our continued focus on the Customer 1st strategy. Our first quarter results give us the confidence to raise our guidance for the year."
Looking forward, maintained its fuel year identical store sales forecast of an increase in the range of 2.5% to 3.5%, but modestly elevated its full year profit forecast range to $2.73 to $2.80 from an earlier forecast of $2.71 to $2.79.
The company said its strong financial position allowed it to return more than $1.3 billion to shareholders through share buybacks and dividends over the last four quarters and during the first quarter, Kroger spent $146 million to buy back 4.5 million shares. It also invested $646 million in capital improvements during the quarter, up from $557 million for the same period last year. Full year capital investments are expected to range from $2.1 to $2.4 billion.
Kroger ended the quarter with 2,419 supermarkets and multi-department stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's. The company also operates 784 convenience stores, 322 jewelry stores, 1,182 supermarket fuel centers and 37 food processing plants in the U.S.